The True Tale of Deregulation featuring the Boeing 737 Max took another plot twist on Thursday. From The New York Times:
As the pilots of the doomed Boeing jets in Ethiopia and Indonesia fought to control their planes, they lacked two notable safety features in their cockpits. One reason: Boeing charged extra for them. For Boeing and other aircraft manufacturers, the practice of charging to upgrade a standard plane can be lucrative. Top airlines around the world must pay handsomely to have the jets they order fitted with customized add-ons...other features involve communication, navigation or safety systems, and are more fundamental to the plane’s operations. Many airlines, especially low-cost carriers like Indonesia’s Lion Air, have opted not to buy them - and regulators don’t require them.
Whose genius marketing idea was this? OK, charge the airline more for extra legroom seating and so on. But devices that help keep the pilots from flying the plane into the ground? Those would seem to fit the definition of mandatory. Turns out it's just another example of shareholder value killing people.
Add-on features can be big moneymakers for plane manufacturers. In 2013, around the time Boeing was starting to market its 737 Max 8, an airline would expect to spend about $800,000 to $2 million on various options for such a narrow-body aircraft, according to a report by Jackson Square Aviation, a consultancy in San Francisco. That would be about 5 percent of the plane’s final price.
Boeing charges extra, for example, for a backup fire extinguisher in the cargo hold. Past incidents have shown that a single extinguishing system may not be enough to put out flames that spread rapidly through the plane. Regulators in Japan require airlines there to install backup fire extinguishing systems, but the F.A.A. does not.
“There are so many things that should not be optional, and many airlines want the cheapest airplane you can get,” said Mark H. Goodrich, an aviation lawyer and former engineering test pilot. “And Boeing is able to say, ‘Hey, it was available.’” But what Boeing doesn’t say, he added, is that it has become “a great profit center” for the manufacturer. Both Boeing and its airline customers have taken pains to keep these options, and prices, out of the public eye.
The Justice Department is issuing subpoenas now in a criminal investigation of Boeing, but I don't expect anything to come of that except an impressive-sounding fine that Boeing will pay out of the petty cash drawer. Putting corporate officers in the slam is not something we do much any more.
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